5 huge finance stories you probably missed

The big financial stories of 2013 have been hard to miss, be it the surging stock market, the Fed’s policy moves or the Twitter IPO. But what about the news that flew under the radar? We surveyed financial professionals about the headlines that didn’t capture as many eyeballs, but that may prove just as significant in the long run. Here are five they mentioned:

— By Charles Passy

Shutterstock

Slide 2 of 7

Offshore tax havens come to light

An extensive investigation by the International Consortium of Investigative Journalists looked at some 120,000 offshore companies and trusts in such places as the British Virgin Islands and the Cook Islands and exposed the “hidden dealings of politicians, con men and the mega-rich the world over.” The report showed how such individuals use “complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.” As John Voss, content director of the CFA Institute and author of “The Intuitive Investor,” notes, the investigation sends a warning signal to investors, large or small, considering such loopholes. “This is of import,” says Voss of the message.

Shutterstock

Slide 3 of 7

Another IPO of note

Put Twitter aside for a moment. Perhaps the most significant IPO of the year was Plains GP Holdings, an oil pipeline company. The mid-October offering raised $2.82 billion for the company, and the stock, priced initially, at $22, is up more than 20% to date. “The IPO speaks to the remarkable growth of U.S. energy and the massive need for energy infrastructure,” says Darren Schuringa, managing partner of New York-based Yorkville Capital Management.

Bloomberg

Slide 4 of 7

The rise in home rentals

Sure, home sales are starting to improve — so much so that prices are at their highs in 10 of the 50 top markets. But demand for rentals is also soaring, pushing prices (for apartments at least) 11.3% higher since 2009, according to Reis, Inc., a research firm. The reason for the boom? The tight credit market makes it difficult for many would-be buyers to secure a loan to purchase property, says Kirk McGary, chief executive of Real Property Management, one of the country’s largest rental management companies. The takeaway for investors may be that it’s time to become landlords — or to invest in companies that work in this growing sector.

Getty Images

Slide 5 of 7

The rise in Japanese stocks

U.S. stocks may have enjoyed a robust year, but Japanese equities did even better: The Nikkei surged by nearly 60% in 2013, marking its best year in more than four decades. And it’s a trend that could carry over into 2014, says Bo Lu, chief executive of FutureAdvisor, a San Francisco-based investment firm. He points to everything from the spurring of Japanese exports to the sheer size of Japan’s economy (it’s the world third largest). “Our message to clients continues to be that diversification outside the U.S., including rebalancing into markets such as Japan that have previously underperformed, is critically important for long-term investment success,” Lu says.

Getty ImagesBryan Berard, of the New York Islanders, was allegedly scammed by Kenner and Constantine.

Slide 6 of 7

The real life wolves of Wall Street?

Bernie Madoff was still in the news this past year. And so was hedge-fund guru Steven A. Cohen, whose SAC Capital has been under federal investigation. But perhaps the most alarming — yet little noticed — tale of investment professionals behaving badly this past year involved Phil Kenner and Tommy Constantine. The two were jailed on charges of fraud as part of an alleged scam involving equity stakes in a Mexican golf resort (investors were supposedly led to believe they were getting a much large stake than they were). What’s made the case all the more interesting is that many of the investors were professional hockey players. (Kenner was a high school and college hockey player — hence, the connection.) The lesson of the situation, says Charlie Massimo, chief executive of New York-based CJM Wealth Management, is that anyone can be duped. “It happens so easily because investors are not on guard for this stuff,” he says. His advice? Stick to traditional, “plain vanilla” investments.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.